Chinese state-owned clean energy company SDIC Power Holdings announced its partnership with battery manufacturer Contemporary Amperex Technology to invest approximately $4.9 billion (CNY33.4 billion) in developing a new large-scale hydropower station in the Yalong River Basin on the eastern edge of the Qinghai-Xizang Plateau.
A subsidiary of SDIC Power, Yalong River Hydropower Development, plans to establish a joint venture with CATL that will hold a 90:10 ownership stake. This joint venture will oversee the investment, construction, and operation of the Yagen II Hydropower Station. The parent company revealed late yesterday that the project is expected to take just over eight years (101 months) to complete.
CATL has not issued any public statement regarding this project, and SDIC Power did not disclose further specifics about the partnership.
The Yagen II Hydropower Station is designed to have an installed capacity of 2.4 gigawatts, featuring four turbines each with a capacity of 600,000 kilowatts. It’s projected to generate around 8.6 billion kilowatt-hours of electricity annually, which could reduce carbon dioxide emissions by approximately 4.5 million tons per year, based on calorific value calculations.
Construction is scheduled to begin with the first unit coming online in 2035, followed by the remaining units in the subsequent year. However, final approval from China’s National Development and Reform Commission is still pending.
Located on the main course of the Yalong River in Sichuan Province’s Yajiang County, the Yagen II Hydropower Station is part of an overall plan called “One Regulating Reservoir, Seven Cascade Stations” for the middle section of the river. Currently, two additional stations are operational, three are under construction, and construction has yet to start on the last.
Yalong River Hydropower Development holds the license as the primary developer of cascade hydropower stations along the river’s main channel.
While five hydropower facilities in the downstream section are already operational, the combined installed capacity of all stations on the entire basin now reaches 19.2 million kilowatts. The company notes that the ten upstream stations are still in long-term planning stages.
The Yagen II project is a critical component of the cascade development in the river’s middle section. Once operational, it will enhance the overall power system in Sichuan and improve water resource coordination among the seven cascade stations. This will also increase profitability for Yalong River Hydropower Development.
As of last year’s financial report, 72% of SDIC Power’s total installed capacity was generated from clean energy sources, with hydropower accounting for 45%. The Yalong River Basin development remains a core asset for the company.
Additionally, by the end of last year, CATL acquired a 10% stake in a project company managing the Danba hydropower station on the Dadu River, which has an installed capacity of 1.15 million kilowatts. This move aligns with CATL’s strategy to pivot from solely producing batteries to offering integrated energy solutions, including power generation, storage, and consumption, by investing in upstream green energy projects.
This strategic shift reflects industry insights that CATL aims to develop a comprehensive green energy ecosystem.
In stock trading, SDIC Power’s shares increased by 0.5% to close at CNY15.03 (USD2.22) in Shanghai. Meanwhile, CATL’s stock rose by 1.5% to CNY382.20 (USD56.43). Overall, the Shanghai stock market gained 1.9%, and the Shenzhen Component Index surged 4.8%.